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Direct Subsidized and Unsubsidized Loans

Direct Subsidized and Unsubsidized Loans

Direct Loans are federal loans to help students pay for college expenses. The lender is the U. S. Department of Education (ED) rather than a bank.

Students apply for Direct Loans by completing the FAFSA. Loans are then offered to eligible students with their financial aid package.

If a student accepts these loans the student MUST complete Loan Entrance Counseling and sign a Master Promissory Note (MPN) at studentloans.gov before payment will be released.

Direct Subsidized loans do not begin to accrue interest as long as the student is enrolled at least half-time and during deferment periods.
Otherwise the interest rate for this loan is 3.86% for loans disbursed between July 1, 2013 - June 30, 2014.

Direct Unsubsidized loans begin to accrue interest during all periods. The interest rate for this loan is 3.86% for Undergraduates and 5.41% for Graduate students for loans disbursed July 1, 2013 - July 30, 2014. 

More information about the Direct Loan Program and the aid application process can be found at studentaid.ed.gov/types/loans/subsidized-unsubsidized

Listed below is  information on the amounts of loans availabe to students for each academic year.

Year

Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$6,500—No more than $4,500 of this amount may be in subsidized loans.

$10,500—No more than $4,500 of this amount may be in subsidized loans.

Third-Year and Beyond  Undergraduate Annual Loan Limit

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Graduate or Professional Students Annual Loan Limit

Not Applicable (all graduate and professional students are considered independent)

$20,500 (unsubsidized only)

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Notes:

  • The aggregate loan limits include any Subsidized Federal Stafford Loans or Unsubsidized Federal Stafford Loans you may have previously received under the Federal Family Education Loan (FFEL) Program. As a result of legislation that took effect July 1, 2010, no further loans are being made under the FFEL Program.
  • Effective for periods of enrollment beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Direct Subsidized Loans. The $65,500 subsidized aggregate loan limit for graduate or professional students includes subsidized loans that a graduate or professional student may have received for periods of enrollment that began before July 1, 2012, or for prior undergraduate study.  

Graduate and professional students enrolled in certain health profession programs may receive additional Direct Unsubsidized Loan amounts each academic year beyond those shown above. For these students, there is also a higher aggregate limit on Direct Unsubsidized Loans.

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